Rio Tinto copper production rises as Oyu Tolgoi ramps up

Rio Tinto Group’s copper production rose 9% in the first quarter, thanks to a ramp-up at the Oyu Tolgoi copper mine in Mongolia, while iron ore output in Australia also climbed in spite of seasonal weather disruptions.

Copper, the key metal for electrification and a priority for all major mining companies including Rio, is seeing soaring demand as the world decarbonises and data centers see growth. Output of the red metal jumped to 229 000 tons, Rio said in a statement Tuesday.

Production from the world’s biggest copper mine, Escondida in Chile, continues to decline due to falling ore grades, but that was offset by operations at Oyu Tolgoi where Rio aims to produce half a million tons of copper per annum in the coming years.

“The Oyu Tolgoi copper mine continues to ramp up as planned and our integrated aluminum business, again, delivered a strong performance,” Chief Executive Officer Simon Trott said in filings.

The open pit mine at Oyu Tolgoi in Khanbogd, Mongolia. Image: SeongJoon Cho/Bloomberg

Production of iron ore from Australia rose in the first quarter, while sales edged up 2% but missed analyst consensus estimates. Two cyclones that shuttered ports over the reporting period impacted shipments.

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Output of the key steel-making material reached 78.8 million tons for the three months through March, up 13% from the same period a year earlier. The company maintained its full-year Australian sales guidance of 323 million to 338 million tons.

The world’s No. 2 miner is continuing to ramp up production from its Simfer mine at the Simandou iron ore project in Africa’s Guinea. Simfer is a major growth development for the company and first production was achieved late last year, with the initial shipment delivered to China this month.

The war in Iran, which began in late February, has had a limited impact on Rio so far. The company consumes about 1.6 billion liters of diesel across its mines each year and higher prices are “steepening the cost curve,” it said.

Rio is also one of the world’s largest aluminum producers and prices have soared on cuts to supply. Smelter curtailments due to the war have lifted expectations of a global aluminum deficit in 2026, the company said.

“We continue to closely monitor the evolving situation in the Middle East,” Trott said.

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Aluminum production rose 1%, while bauxite fell 11%.

Simon Trott. Image: Matt Jelonek/Bloomberg

Rio is under pressure to complete asset sales as it stares down significant debt, higher currencies and inflationary pressures. When Trott was named CEO in August, he outlined his vision to sell the company’s borates and titanium businesses along with infrastructure with a view to bring in proceeds of about $10 billion, which would be used to pay down debt.

The company said it was “actively testing the market” for those businesses.

Rio will hold its annual general meeting on May 6.

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